Files in Transcoded folder not auto deleting files

[bimbamboom]

Maximum folder size
Choose a maximum size for the transcoded folder. When the maximum is reached, older files in this folder will deleted when more file space is required for transcoding.

For testing purposes I have set a 2GB limit for my transcoded folder. When i transcode new files the old files are not deleted from the folder. I get a warning that the folder is full. But after I click Ok, the new file continues to be transcoded and the folder grows larger in size. See attached screen image. Is there something I'm not understanding here?
Thanks in advance.